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Nushagak annexation vote set for April 10

Dillingham voters will have a chance to give the proposed and approved annexation of the waters of the Nushagak Commercial Salmon District the thumbs up or down on April 10 following the Local Boundary Commission's approval of the move in mid-December.

The city of Dillingham could, at this point, go ahead with the annexation, said Dillingham City Manager Dan Forester. But the city council has chosen to put the action to a vote of the people, Forester said.

"Annexation can be a done deal at this point," he said, "but the council said when they started this process that the intent was to get all the approval in place so the community itself could decide firstly whether it wanted to annex and secondly whether it wanted to approve a raw fish tax."

The proposed annexation includes nearly 400 square miles of commercial fishing waters and 3 square miles of land in the Nushagak Bay and part of Wood River. If approved, the city plans to levy a 2.5 percent sales tax, which should bring in about $700,000 per year based on recent figures. The funds would boost the city's current operating budget by about 10 percent, said Forester.

The reason for the action is simple, Forester said. Those who participate in the fishery use city facilities, including the city's ice plant, bath house, and harbor facilities, all of which currently lose money. There is a serious erosion problem in the harbor that needs to be dealt with, and hundreds of seasonal harbor users who don't pay any city taxes toward the effort.

"This is a very transparent way for a jurisdiction to receive revenues to offset costs and do more of what we are doing now," Forester said.

Not everyone is in favor of the move, however. Communities around Nushagak Bay, as well as the Bristol Bay Native Association, filed objections to the action with the commission, saying that the sales tax is charging them for services they don't use.

The city of Manokotak, for example, has 57 set net sites fished in 2010 and 30 to 40 drift net permit holders, according to a resolution passed by the Manokotak city council. Fishing tenders from three processors are stationed off Igushik Beach.

The drift net vessels harbor in the Igushik River and deliver to the Trident Seafoods tender which in turn delivers to a floating processor anchored at Clarks Point.

"These set netters from Manokotak depend on Manokotak for their support rather than Dillingham," the resolution states. "The boats from Manokotak are infrequent users of the harbor facilities of Dillingham."

Like many other communities around the bay that filed similar petitions, Manokotak said the bay is an area of regional importance, "not subject to the influence of a single community in the Bristol Bay region."

Adding to the frustration is the fact that while city of Dillingham voters, of which some 16 to 17 percent are permit holders in the Nushagak Bay Salmon harvest, get to vote on the action, those who live outside the city limits do not. This has sparked some debate about creating a borough for the region that would inclusive of everyone in the region.

But the city of Dillingham said during the summer fishing season, the impacts of those who fish the salmon-rich waters on the community are obvious. During a bad weather day, hundreds of boats are moored up next to each other in the harbor. At low tide, they are all sitting in the mud. Some people live on their boats, while others haul them out for servicing.

"The fees and taxes paid to the city of Dillingham by its residents and summer fisheries-related visitors are not equal to the cost to the city to provide services and facilities that support area commercial fisheries," a fact sheet produced by the city said.

Forester said some have complained that the fish tax would cut into the already slim profits of low-income fishermen, a complaint that the city will take up at a meeting to be held today in Dillingham. The city council is considering offering some sort of refund based on income levels, he said.

Local fish taxes, or local raw fish severances, are not uncommon in the region, Forester pointed out. Some 13 other cities and boroughs in the region bring in revenues from such taxes, including Togiak, which levies a 2 percent tax, Naknek with a 3 percent tax and Pikes Point and Egegek, each with 5 percent tax.

The local fish tax is different from the state sales tax, which is split between the state and the local communities. The state tax is based on processing, and according to Dillingham's fact sheet, state data shows that no additional processing is occurring in the area that is proposed to be annexed, therefore no additional funds will be collected by Dillingham from the state tax.

"This isn't anything out of the ordinary for this area," Forester said. "It's business as usual."

The Local Boundary Commission, in its approval of the annexation, required the city to meet with communities around the district in an effort to iron out details.

Those talks have been ongoing, and the council will take action in coming weeks prior to the vote to deal with city code issues that should not apply on to the fishing waters, such as laws against the discharge of firearms. In addition, any processing ships that sell groceries and fuel out on the water will not be charged city sales tax on those sales.

"There are a lot of pieces like that the council is trying to work on," Forester said.

The approval of the annexation action reverses a 1987 action by the commission that denied the action based on the decision that Nushagak Bay is an area of regional importance.